Timing a house sale with moving into rental

sturgeon

I’m selling my flat and plan to move into rental for 12 months. I’m a little concerned how to best time this, I also live in London where the rental market is wild. 

I can’t/don’t want to sign a contract for rental until I’ve exchanged or I’ll be tied in and cannot afford this. Is the best option to set a window between exchange and completion (4 weeks?) to allow me to find a place and sign contract, also allowing for the fact that not every property is immediately available? I’ve openly told buyers when marketing the property I’m happy to move into rental which removes the chain, making things smoother. So id expect a bit of leniency on the time between exchange and completion so I can secure my rental. 

I haven’t rented for years so I’m very out of practise. I’d plan to keep a close eye on the market, I expect my solicitor would give a heads up on when it’s possible to exchange (how much notice would they give?) and in the days running up to that I can search for a property and move forward but avoid signing until I exchange a few days later. Once we’ve exchanged at least I’m protected. 

Is this the best route or should I be doing things differently? Any pitfalls to consider? All advice appreciated. Thanks. 

Flugelhorn

tricky - the time between exchange and completion is very much fixed when the contract is exchanged so you would have to be out on that date .having helped someone find a rental property (not in London) - would reckon that 4 weeks is the lower end of the time scale. there is high demand for rental properties and you can't guarantee getting any particular property as there may be multiple people looking and offering. Then the approval process can take 10-14 days 

theartfullodger

Do your best but recognise that you may have resort to hotel or AirBnB

youth_leader

I sold my house at auction and had to move into a rental a month before the auction, to secure the rental.   I was surprised to be unsuccessful at my first viewing, but the agent said my income didn't meet the 30 x rent  'affordability' calculation.  My savings did not count.

Is there any way you could put your possessions into storage and stay with a friend/family while you are looking?

sturgeon

Thanks. So I can ask for the duration between exchange and completion to be set before exchanging can’t I? For example can I ask for it to be 4-5 weeks (or 4), isn’t it usually 2 weeks or so hence this is a small extension? I still may struggle but at least it gives me a better chance and I can move into an Airbnb if desperate and time runs out. 

Flugelhorn

sturgeon said:

Thanks. So I can ask for the duration between exchange and completion to be set before exchanging can’t I? For example can I ask for it to be 4-5 weeks (or 4), isn’t it usually 2 weeks or so hence this is a small extension? I still may struggle but at least it gives me a better chance and I can move into an Airbnb if desperate and time runs out. 

it can be whatever you agree to - we had someone ask for 8 weeks so that they could find a rental property, I was very reluctant to agree as felt it was too long and anything could happen -  but didn't have much choice in the matter and had to go with it

. As it was Covid happened and my reluctance to agree to a long gap was totally justified

DullGreyGuy

sturgeon said:

Thanks. So I can ask for the duration between exchange and completion to be set before exchanging can’t I? For example can I ask for it to be 4-5 weeks (or 4), isn’t it usually 2 weeks or so hence this is a small extension? I still may struggle but at least it gives me a better chance and I can move into an Airbnb if desperate and time runs out. 

The period between the two is set in the time running up to exchange because it's defined in the contracts that you exchange. 

A google shows a wide range of answers on what the average is and so it's hard to know for certain. Most quote 1-2 weeks but also point out it can be the same day or much longer. A "small extension" is doubling or quadrupling the time and the buyer may not be happy with this if they are in a chain given they cannot sign until their sale is exchanged and their buyers may want to move faster leaving them homeless for a couple of weeks or losing their sale. 

Once the exchange has happened they are on the hook for purchasing too... the longer the gap the more chances something could happen to the property they are committed to buy. 

4 weeks isn't totally unreasonable but worth having a plan B if your buyer says they'll pull out without a quicker timetable. 

sturgeon

Thank you. I’m going to speak to some rental agents about timelines and have also let my agent handling the sale know I need a small gap between exchange and completion. If I need to move into an Airbnb for a week or two it’s not the end of the world, just not ideal as all my belongings will need to be stored by the removal company until I can move into the rental property. 

RedFraggle

I looked for rentals when we were getting close to exchange, found one and had references done etc. then pushed for exchange before I signed the rental contract with a 2 week gap before completion. 
My buyers understood the situation. 

InMyDreams

As a buyer, all other things being equal, I would prefer to buy a ‘no chain’ property knowing that there needed to be a month between exchange and completion to facilitate that, than a property that would be in a chain, especially if my seller (or their seller…) still needed to find somewhere to buy.

So as long as you were up front from the start, I can’t see a long gap between exchange and completion as more of a deterrent to a buyer than a property that could potentially end up in a long chain. Every extra link in a chain adds a risk of delays or even complete collapse.

And unless you were able to prove that you could afford the rent even if the flat sale were to fall through, then you are unlikely to be able to get to the point of signing a rental agreement before exchange even if you wanted to anyway.